HUTA Estimates for FY 2014-15 and FY 2015-16 Now Available

Sharp Decline Anticipated

The estimates are based on new statewide revenue estimates from the California Department of Finance released in January with Gov. Jerry Brown’s FY 2015-16 state budget proposal. In particular, cities should note the approximate 20 to 25 percent downturn in revenue for FY 2015-16 from the prior year. This is largely due to falling gasoline prices and consumption as well as “true ups” under the fuel tax swap system.

The sharp decrease in transportation revenues is garnering significant attention from the Governor, Legislature, and press. Discussions on how to increase transportation funding while providing more stability are intensifying. Many are looking to a road usage for a long-term solution, but the League is joining many other transportation stakeholders to let the Legislature and Governor know that there is a crisis now. For years the League has argued that it is a matter of paying now or paying much more in the future. Results from the 2014 Local Streets and Roads Needs Assessment support that fact: today’s $40 billion backlog will grow to $51 billion in just five years if additional investment is not made quickly.

In addition, the League is actively advocating that some measure needs to be put in place to stabilize gas tax revenues before the start of FY 2015-16. Impacts of the 2010 gas tax swap have been strongly felt since its enactment. It is time for the Legislature and Governor to act to minimize the wild swing of revenues that make it difficult to plan multi-year transportation projects.

A full discussion of transportation revenues and the 2010 gas tax swap can be found in the report.